For the six months ended June 30, the Chepstow, Wales-based company posted a net loss of 6.8m pounds ($13m), compared to a net loss of 5.6m pounds ($10.6m) a year earlier. As expected, sales rose to 758,000 pounds ($1.4m) from 213,000 pounds ($402,000).

The company said worldwide delays in deployment of next-generation networks continue. It had previously warned in early July that its full-year results would fall short of market expectations, after it admitted that its negotiations with a major network equipment vendor and tier-1 service provider (widely assumed to be BT Group Plc) to provide the Session Border Controller elements of a next-generation network, had yet to result in a firm order.

Newport had expected to receive the order before June 30, but over two months later the company is now warning that even if negotiations were to be successfully completed before the end of 2006, it is now unlikely that the new business will contribute significant revenues in the current year.

BT is currently building its IP-based network, known as the 21st Century Network, or 21CN, with 350,000 customers in Cardiff, Wales scheduled to be moved over to its IP-based network in November this year. Speaking to Computer Business Review in July, a BT spokesperson confirmed that the roll-out was on schedule and equipment orders for the core network had been placed.

I am committed to the company and I continue to provide my full support, said Newport’s chairman Sir Terry Matthews in a statement Wednesday aimed at shoring up investor confidence. Matthews founded Newbridge Networks Corp in 1986 and turned it into a major telecoms equipment player that employed more than 6,500 people worldwide and recorded 1999 revenue of $1.8bn. In May 2000, he sold the company to Alcatel SA for 4.4bn pounds ($8bn). He also co-founded Mitel Corp in 1972.

Despite the public backing of Matthews, investors responded savagely and Newport’s shares plummeted 42.2% to 3.25 pence ($0.06) on the London Stock Exchange on Wednesday afternoon, a far cry from the 71 pence ($1.30) the shares were valued at when the company held an IPO on London’s alternative stock exchange in May 2004.

In a further effort to reassure the market regarding liquidity, Newport announced another cost-cutting exercise. In January, it received 14.7m pounds ($27.7m) following the placing of 103 million new ordinary shares, and by the end of June its cash resources were 10.5m pounds ($19.8m). By the end of August, this had come down to 8m pounds ($15m).

Prior to the July announcement, Newport employed 100 staff, but two months ago it opted to reduce operating expenses by 20%. It now employs 85 staff, and Newport said it that in light of the current market environment with continuing NGN delays, the board has decided to implement a further reduction in operating expenses to conserve cash resources. This means more job cuts for its reduced 85-strong workforce, which it said should help reduce the cash burn to less than half of the prevailing run rate a few months ago.

Newport believes it has sufficient cash resources to last through calendar year 2007. It is important create the right balance of revenues and costs, chief executive John Everard told Computer Business Review.

The company makes VoIP session controllers that provide security for a carrier’s IP-based network. Each Session Border Controller costs about 70,000 pounds ($128,355) upwards. The equipment sits at the border of the IP infrastructure and protects the network from malicious use. Its favored path to market is via network equipment makers, although it is in discussions with a unspecified number of tier-1 carriers in Europe, Asia, and even North America.

The company expects to see better industry and revenue growth for its sector in 2007 and 2008.